Proposition M - Taxi Measure

What it does

This proposed ordinance would amend a 1978 initiative measure (“Proposition K”) relating to the regulation of taxicabs. It would empower the Taxicab Commission to issue various special permits and it would allow these permits to be held by corporations rather than only by cab drivers as is currently the case.

Why it is on the ballot

Proposition K established rules for regulating the taxicab industry. In particular, the measure provided that permits can be held only by individuals and that permit holders must be active drivers.

There has been much concern regarding the quality of taxi service in San Francisco. Among other things, there are too few taxicabs, service is not readily available in the neighborhoods, and the lack of a central dispatch system limits taxicab availability.

Over the years since 1978, there have been several initiative measures relating to taxicabs. These measures typically reflect the interests of either the taxicab companies or the taxicab drivers and have as their purpose the promotion of one of these interests against the other. Specifically, the restriction on the number of permits has created “surplus value” connected with the permits (that is, a market value created by artificial scarcity). The cab companies and the drivers have been fighting for at least 30 years over who has the right to capture this value. This fight has nothing to do with the public interest. In fact, one could make a good case that the very existence of this surplus value is against the public interest.

In 1998, a Mayor’s Taxi Task Force, representing the perspectives of the taxicab industry and government, completed a report making various recommendations for improving taxicab service. More recently, SPUR has convened a task force with the aim of developing an action plan to improve taxicab service, including refining and implementing taxicab reforms.

Proposition M does not draw upon these reform efforts, with the exception of the change in method of calculating the permit holder’s driving requirement. Rather, it was placed on the ballot by representatives of the taxicab companies, with no prior hearings or deliberation by the Taxi Commission, the Board of Supervisors or any other public (or private) body. It was placed on the ballot by seven supervisors. It should be noted that Supervisor Gavin Newsom, the co-chair of the Mayor’s Task Force, is not among the seven and, in fact, opposes Proposition M.

Pros

Those who support this measure state:

• This measure would improve neighborhood taxi service by permitting the Taxi Commission to issue permits that would serve specific geographic areas of the city, such as the outer neighborhoods.
• The current program of providing “ramp taxis” to serve the elderly and handicapped is subject to legal challenge and this measure would expressly legalize them.
• The 800-hour driving standard is more flexible, thereby accounting for family or medical leave, while still requiring the permit holder to be a regular driver.
• Tightening the corporate transfer prohibition will eliminate a “loophole” which has allowed companies to fight revocation of their permits.

Cons

Those who oppose this measure state:

• The only purpose of this measure is to undo Proposition K by creating a separate category of permits which can be held by companies, to the disadvantage of individual drivers.

SPUR's analysis

• Prop. M would give the Taxi Commission the discretion to issue certain specialized permits (such as for “ramp taxis” and for taxis which are restricted to certain types of service (e.g., within neighborhoods or airport-only). Permits for ramp taxis are already being issued, but the proponents argue that their legal authority has been questioned. The most significant change is that these new types of permit are expressly exempted from the prohibition against corporate ownership of permits. Similarly, this measure attempts to allow taxi permits to be held by individuals who manage taxicab companies, in addition to individuals who drive taxicabs. Thus, it would appear that the principal effect of this measure would be to repeal Proposition K with respect to these categories of taxis. An applicant for a permit would no longer have the burden to prove that public convenience and necessity require issuance of the permit.
• Current law requires a driver to operate the vehicle for at least four hours during any 24 hour period on at least 75% of the business days during a calendar year. Proposition M would repeal this standard and require, instead, that the permit holder drive for at least 800 hours in each consecutive 12 month period.
• Under current law, a corporation which owns a permit may not sell or transfer more than 10% of stock ownership. Proposition M would make it clear that an increase in the percentage of ownership in a corporation by one or more original shareholders by means of a buy-out, re-purchase or otherwise, counts toward the 10%.

Proposition M has nothing to do with providing better taxicab service for San Francisco. Rather, it is only the latest in a long series of initiative measures put on the ballot by one or the other of warring industry factions to further its own interests. Neither side in this dispute has the interests of San Francisco taxi users in mind. As an aside, it should be noted that both the proponents and opponents of Proposition M have hampered meaningful reform of the taxicab industry in the public interest.

San Francisco needs to address reform of the taxicab system in a comprehensive way, and in a manner which makes taxicab service an integral and effective component of the transportation system. This would include:

• a centralized dispatch system.
• cab stands in the neighborhoods
• issuance of new permits (source of which has already been done)
• limitation on gate fees.

SPUR has convened its own task force to formulate taxicab policy and reforms in the public interest. If SPUR’s task force moves forward, a package of measures could be put forward within the next year.

SPUR recommends a no vote on Proposition M for the following reasons:

• The measure represents the position of one faction of a long-standing dispute and does not further the public interest.
• It was placed on the ballot without having been subject to public hearing by the Taxi Commission, the Board of Supervisors or any other public body.
• With one small exception, it does not incorporate, and in one case contravenes, the recommendations of the Mayor’s Taxi Task Force.

SPUR will continue its efforts to formulate a public interest measure to deal with the provision of adequate taxi service.

SPUR recommends a "No" vote on Proposition M.